Wolfowitz: We were asked to do this briefing because I gather there's a lot of interest in the Defense Planning Guidance process, which is going on simultaneous with our doing the QDR, or the Quadrennial Defense Review. And since our whole way of doing things is a bit complicated, I thought it might be helpful to give a little bit of an explanation of how the two relate, and in some very broad terms what I think the Defense Planning Guidance will be trying to achieve. I say very broad terms because we are not yet finished with it, and that means that everything is still open to debate and discussion. I think someone said in Washington, "No debate is ever finished." But the Defense Planning Guidance will be finished. It's not done yet.

What it is is guidance for the service programmers in developing their Program Objective Memoranda that lay out the Five Year Defense Plan. And they are already starting to work on it. They have to complete that work rather soon, and essentially have it nearly finished by the time the QDR itself is finished. So this is to give them guidance, and it's an annual document that tells them how to go about building those programs. This year, in fact, we are trying to cut down the size and weight of the document. It used to sort of have everything but the kitchen sink, and it had so much guidance that at the end of the day, I think it's fair to say it didn't really guide anything, because if you tell people 1,000 percent of what they're able to do, they can pick the 100 percent.

The approach here is to try to pick those things, identify those priorities that are most important to the secretary and the president to accomplish, and in particular to identify, first of all, very specifically the requirement that we talked about when I briefed you on the QDR, that is the need to balance among the competing risks that we face as a department, and in addition to focusing on programming for war-fighting needs, to also program for what we call force management requirements, that is the need to maintain adequate structure and adequate capability to cover the kinds of perstempo requirements that are imposed on us by the various things we do. But in addition to those two requirements, and perhaps most importantly, to balance the requirement for transforming the force and building the capabilities that we need in the next decade and beyond, or what we call transformational requirements.

I think also that -- I mean, I'm certain, though the exact definition isn't done yet -- but that one of the things we're trying to do in this document is to identify the priority transformational goals for the U.S. military. And I guess I could say a tentative list, which is subject to further discussion and debate, would be five major goals:

One, protecting our bases of operation and being able to defeat nuclear/biological/chemical weapons and ballistic missile attack.

Second is to project and sustain U.S. forces in distant anti- access or area-denial environments.

Third is to be able to deny enemy sanctuary through various means, particularly long precision strike of different kinds.

Fourth, to be able to conduct space operations and fifth, to ensure joint and combined interoperability and integration of long-range strike and deep maneuver forces.

That may or may not be the list as it survives; that's sort of roughly the kind of level of goal that we're trying define in the document with some more specificity.

There's always a question of -- in a sense this exercise, I guess it's fair to say, is budget-driven. The programmers are given fiscal guidance, they're told within that fiscal guidance, these are the priorities the secretary wants you to address. After you address those priorities, we going to see what things still survive in the budget and what things fall out.

From the other end, with the QDR, we have a strategy-driven process, where, by the end of the QDR, we should be able to identify more clearly what the resource requirements are to fulfill this new strategy. Hopefully, if we've done our work right, and if the budgets are right, these two requirements will converge. If there's a problem, we will end up with having to identify a gap between strategy and resources.

If we see such a gap, I want to emphasize, we do not want to proceed, as so often has happened in the past, with what's called a strategy/resources mismatch where, because you're trying to do more than you've programmed for, you end up shorting yourself in certain areas and doing it not in a systematic way, but in a kind of haphazard way.

If there is that kind of gap, then obviously we either have to increase the resources to do the strategy or adjust the strategy in some way to be less ambitious.

But at the end of the day, it is very important -- obviously, even a country with our resources has limits on everything we do. At the end of the day, you do have to fit resources and strategy together. But it's very important to do it in a balanced way, a way that balances the different risks that we have talked about. And I will repeat the force management risk, the operational risk, the future capabilities risk. And at the same time -- and this is sort of the fourth dimension, which isn't quite in the same plane as the other three -- and that's the efficiency risk, the way in which we manage our resources.

I asked General Myers to join me. This is the secretary of Defense's Planning Guidance when it's finally issued, but it's been a very collaborative process, I think it's fair to say. In doing this work, we've had in fact both in this exercise and in the QDR more high-level interaction than I can recall in any of the three similar such exercises that I have been engaged in over the course of now three tours here in this building. And in other people's memory, it's -- I mean, I know of no one who has experienced this level of interaction among the senior leadership.

It's not only here in the department but with respect to the planning guidance, we've had -- I think it's two and maybe three video conferences with the various CINCs, to get their views on the document. I have to say the interesting arguments are not only between civilians and uniform people, but very often some of the most interesting issues are raised by uniform people. There's obviously a difference in perspective between the CINCs and the services, and all of those are -- we're trying to elevate to the secretary, so at the end of the day he's the one who makes the decisions.

But I think one thing there is a strong consensus on, and that is that this is a change in strategy, that it is a very welcome change, that it is a change that allows us to take much more specific account of the different tasks we want our military to perform, and to achieve a better balance among those requirements.

So with that, I'm happy to try to answer questions.

Q: Mr. Secretary, regarding these, there are reports, as you know. floating around out there about the force cuts that you're -- that are under consideration -- I mean, deep cuts in the Army divisions, air wings, possibly a carrier battle group.

Are you going to go to the services when you talk about these five criteria or targets or whatever you're talking about, and say, "Look, we have decided or are proposing that these cuts be made in the Army, Air Force, and Navy, and we want you to come back to us with plans for these, in these criteria, based on these cuts"? Are you going to suggest cuts, are you going to order cuts and say let's build around those, or are you going to give any figures at all to the services?

Wolfowitz: That really hasn't been decided yet. It's something we're going to decide. I think both the QDR process and the defense planning guidance process need some structure to work around. As I think I briefed you -- when was it -- last week [ Transcript ], we presented the secretary with some alternative ways of looking at force structure. We basically have been told to go back and develop another alternative, which we're working on. And hopefully sooner rather than later we'll have guidance on that that goes to both the people doing the QDR and the people doing this exercise.

And it may be helpful also to understand, the implications are different. For the people doing the QDR, the principal thing they're going to be working on, then, is evaluating the risks associated with that force structure. For the people building POM [program objectives memorandum], the principal thing they're going to be working on is the resources required to fund that force structure, the resources that are available within that force structure. And again, it's sort of one is from the top and one is from the bottom. We hope they come together reasonably closely at the end.

Q: We were told earlier today that the SecDef planned to sign off on this thing, I believe tomorrow.

Q: You said in your comments that this is a change in strategy. What is the new strategy?

Wolfowitz: I would say that the two principal changes are, first of all, the change from evaluating risk entirely in terms of our capability to carry out major regional conflicts, and to recognize that in addition to that requirement, there's a requirement to conduct a lot of peacetime operations or, in the terminology of this building, small-scale contingencies. Some of them get pretty big, but they're small-scale contingencies nonetheless.

And the third and perhaps in the long run the most important requirement is the requirement to build capabilities for the future which aren't oriented toward a specific conflict or a specific war plan. Because they are future oriented, they are by definition against somewhat hazier objectives but nonetheless extremely important. And that's the sort of transformational requirements.

Taking explicit account of all of those three instead of -- assuming that the second and third -- that is, the near-term force management and the long-term transformation -- are automatically taken care of if you meet your war-fighting requirements just doesn't work. And so that's the first major change.

And the second change is with respect to looking at the war- fighting requirements. Instead of saying we're going to have these two more or less abstractly sized major war capabilities, we said we start with there are critical areas of the world where we need to have significant forces forward for deterrence; that in each of those areas we want to be able to swiftly defeat an aggression, if it takes place; and finally, we want to have a major war capability to impose whatever terms -- "win decisively," I guess is the terminology. (Chuckling) It was called "unconditional surrender" in World War II. But it's win decisively; to basically have the capability to take whatever initiative is required in one theater while maintaining that ability to defeat aggression in another. It's a more complex formulation. It doesn't reduce itself to simple arithmetic of 3-1/2 or 2-1/2 or 1-1/2, but I think it's a correct strategic description of what our war- fighting goals need to be.

Yes?

Q: Secretary, will the administration be putting out the broader National Security Strategy in the near future, that I think was due to Congress a couple of months ago? And I know the Department of Defense has a role in that. Is that --

Wolfowitz: None of these deadlines that I've encountered ever took account of the fact that it seems to take us a long time to get our transitions done.

But yes, of course, we will. And since I don't set deadlines for the secretary of Defense, I certainly don't set them for the White House, but know they're working on it. I'm sure it will be --

Q: Can I follow up?

Wolfowitz: Yes.

Q: Do you feel that you needed some sort of direction or guidance more broadly from the White House in order to do the more narrow national military strategy that you're working on now?

Wolfowitz: We are consulting closely with our White House colleagues, and we're both getting input from them and they're getting feedback from us. So I guess -- I mean, we have the same thing as with the DPG, QDR, two parallel processes that have to connect at the end of the day, but we can't wait till the end of the day to do one after the other. But we're not working in a vacuum, I mean we're in close contact with them, especially any time we think there's a strategic implication with alternatives we're looking at. And they're certainly very familiar with the work that we're doing.

Yes, sir?

Q: Of the five transformational goals, the fifth one, integration of long-range strike and maneuver forces, could you flesh that out a little bit? I mean, interoperability, that's been around for a long time. What do you mean by that, integration of long-range and maneuver --

Wolfowitz: Okay, well, I'm going to -- you could probably get ten uniformed people in this room and get eight different interpretations and two people who'd say, "I don't have any idea what they're talking about." (Laughs.) But I'll give you my personal sense of it, and it goes back to our experience during the Gulf War hunting Scuds in western Iraq. I mean, we first went after them from the air and we never actually saw any. We dropped a lot of bombs; we didn't see any. Finally, we put some very brave guys in on the ground and they saw quite a few, but they didn't have any airstrikes to call in.

What one could imagine as a major consequence of this -- I hate the buzzword, but I don't know a better one -- network-centric warfare, where you can integrate widely dispersed forces and strike from widely dispersed points, that if you can connect the seams between possible, let's say, light forces on the ground that are finding targets and long-range striking power that can take them out, you have, I think, a truly transformational capability.

We saw a little bit of that in Kosovo, I gather, where again, special operators on the ground were able to find some of the SAMs that were threatening to our airpower, but the seam hadn't been sealed up yet to be able to let those guys bring in the capability that could take it out.

Yes, sir?

Q: Just to clear up something that I think Charlie brought up, and to follow up on it if I could. There clearly are going to be some reductions in major weapons programs, correct, as in reduction in number of F-22s which was announced yesterday. [ Transcript ] You're looking at DD-21 and Crusader and pushing those off past the QDR, so those programs are, at least theoretically, still sort of in play. Is that a correct assumption? And if I could -- (coughs) -- excuse me -- cuts in force structure, although not necessarily in the last round of the review, are still on the table, is that correct?

Wolfowitz: First, to the first question, I think where we'll come out with this planning guidance since -- let me back up.

We haven't yet done the kind of major review of those major programs to be able to come to the conclusions that you've come to already. We know there's a lot of money in those and that obviously, given the need for resources of a variety of things, we're going to look very hard at how much of those we want to buy and maybe in some cases whether we want to buy it at all.

But we've only just really started the process of that assessment, and I think what the planning guidance will probably call for is probably for the senior executive committee to come up with recommendations on those programs that can be plugged in later in the year, toward the end of the program budget review.

On the question about force structure reductions or end-strength reductions, which is a different thing, there's -- I mean, one of the things we're discussing in both contexts is to what level do you want to specify where those sort of reductions ought to be made and to what extent you want them to come out as a result of other sorts of guidance.

I'll give you a "for instance." I mean, you could say, "I want you to have X divisions and Y air wings, and no matter what else you do," or alternatively you could say, "I want you to have certain capabilities. You pay for them any way you have to, and if you feel you need to pay for them by cutting an air wing or cutting a division, that's a decision you make within your budget process."

And we quite honestly haven't come to the final decision on either, and that's part of what this issue of how we deal with alternative force structures will come out.

But I would say, as a general philosophical principle, I think the secretary strongly believes in the whole idea of freedom to manage, of giving people the responsibility for managing their organizations to certain goals; rather than telling them exactly how they should run them, tell them what it is you want them to achieve and then let them figure out how to do it.

Q: But that is -- you're still saying, I think, that in the long run, as you go through this process, a reduction in the overall size of the force is possible.

Wolfowitz: Definitely -- it's definitely possible, and it -- (chuckling) -- again, I need to stress it's possible that it will stay roughly the same. I mean, I think it's fair to say no one is looking at major increases at this point. But -- (laughs) --

(Laughter.) Well, you know, if we went to war tomorrow, that would probably change.

Q: As a follow-up, I'm sure that you're aware that the services have sort of lined up support on Capitol Hill and have arrayed their forces in preparation for -- essentially for battle with the Office of the Secretary of Defense on these issues. What do you do about that from -- you know, if you have to go to war with your services over what the secretary wants to do versus what the services are fighting for?

Wolfowitz: I don't think there's a single important decision that isn't going to engender resistance from some quarter or other; otherwise, it would have been very easy and would have been done a long time ago.

I think our belief is that when we come out with a plan that makes some coherent strategic sense, that at the end of the day we'll get the support that we need to have. And I do think, going back to the point about yes, there are lots of arguments within this department -- I was about to say within this building. It sort of goes out to the far corners of the Earth. And there's somebody who disagrees with almost everything that's suggested, and somebody who has a better idea than someone else.

But there is an extraordinary level of consensus, I believe, around those two big strategy changes that I described earlier, and that's -- that was described -- I'll use the word again -- it was described by the Joint Staff as a paradigm shift. And I think it is a paradigm shift. And I do believe that when the Congress and the country sees that it's a paradigm shift, that will help to overcome some resistance because people will see this is not just a little tinkering at the margins, this is really something important.

Yes, sir?

Q: Sir, we are talking here reduction. And China is building up day by day. And also, according to CIA reports, they are still delivering missile technology to Pakistan, Iran, Libya and other countries. I hope this building has concern for the future, when China will be threat to the U.S. And also, if you have anything on the future of military-to-military relationship with India. So much has been going on in the press that military training, and General Shelton's recent visit to India, and now he's going to retire and what will be the future?

Wolfowitz: Well, on the last point, General Shelton, as you know, when he was in India proposed reviving our U.S.-India defense group. And General Shelton may be retiring, but the idea is not retiring with him. He represented a strong consensus in the department on the importance of building a closer defense relationship with India.

On the other subject that you raised, let me go back and repeat some things I've said before. When you look beyond -- I mean, we can identify Iraq as a threat today and we can identify North Korea as a threat today. When you look out 10 years and beyond, it's, I think, almost foolhardy to try to say who is going to threaten us. In fact, you've probably heard this; if you haven't you should hear it now.

When Secretary Cheney went up for his confirmation testimony in 1989, the word "Iraq" did not appear once in the entire hearing, out of his mouth or anyone else's.

So, as Yogi Berra said, it's dangerous to make predictions, especially about the future, but I think what we can say with some confidence about 10 years from now is that there are certain capabilities that are going to be very important, either because they are known vulnerabilities of the United States that anyone who takes us on is going to work against -- and ballistic missiles is a prime example.

I mean, sometimes we treat this as though it's a -- on both sides as though it's a matter of theology. It's not a matter of theology, it's a matter of American vulnerability that has obviously been identified by countries like North Korea that are hostile to us. And there are other areas of capability where we know we have a potentially transformational advantage, the use of information, the integration of a wide range of intelligence sources. That's something where it's a reasonably strong bet that we can leverage our technology and operational capability into something that will be of enormous importance.

So when we say we're doing a capabilities-based approach to the future, not a threat-based approach to the future, that's what we mean. And I think probably politically that's also a better way to go at it.

Yes, sir?

Q: There's a stated goal of building more ships for the Navy. Is that idea incompatible or inconsistent with cutting a carrier battle group?

Wolfowitz: Not necessarily. And neither one is -- I mean, don't treat either one as a firm decision at this point. But, I mean -- I'm going to speak for other people, not myself. I mean, some people would say that the shape of the Navy should change to having more ships and perhaps at the expense of somewhat less capable ones. So numbers and capability don't always go in the same direction.

I think what I believe there's a pretty strong consensus on is the need over the long term to have as strong or stronger and able presence than we do today. But if you noticed that list of transformational capabilities that I talked about, at least -- well, principally one that focused on countering area denial or anti-access strategies -- I mean, in my answer to the previous question, we know that one of the things people who want to attack our friends or allies are going to do is first figure out how they can keep us away. And one of the things that means is keeping our Navy away. So whatever the shape of the Navy, we want a Navy that is more capable against those kinds of threats.

Q: You mentioned, on the change of strategy, about small-scale contingencies. And obviously, throughout the campaign Bush said the U.S. military should not be overstretched. But tomorrow, the Egyptian adviser to Mubarak, Osama Al Baz, is going to be asking U.S. officials to send U.S. peacekeepers to the Middle East region. What are your thoughts about sending a U.S. force to the region?

Wolfowitz: Well, first of all, I don't have -- I mean, I will leave to my -- we have enough work to do here without doing the State Department's work. I mean, I think the question of whether there's a role or not is something that you would have to ask General Powell or his colleagues.

But on the larger question -- or the question implied that, you know, President Bush said during the campaign that he wants to cut back on these kinds of things. As you see in Kosovo or in the Balkans, that doesn't mean arbitrarily dropping them all. I would say what it means is we have to understand that we're on a budget, that you don't have an unlimited budget for small-scale contingencies. And unless you want to significantly increase the size of the military -- and everyone seemed to laugh a few minutes ago with that as an option -- I mean, the military today is stretched pretty hard to cover the contingencies that it does cover, and we're trying to get a better fix on this.

There are some people who say that the so-called perstempo, the rate which people are deployed away from home, is now down to a manageable level. It certainly was not at a manageable level until quite recently. And we don't want to start adding new requirements onto that force and driving up the perstempo in such a way that we lose people from the military.

So all I would say, if people are considering new American commitments in the Middle East, I hope they will either give us more resources to cover it, or they will tell us what we can stop doing that we're doing today.

Q: Let me follow -- (inaudible) -- just a little bit, though. Do you think -- you don't sound like you're ruling out the possibility of sending troops there.

Wolfowitz: No one has asked me about it, so I haven't even thought about it, okay? (Chuckles.)

Yes, sir?

Q: Mr. Secretary, everybody talks about transformation, but nobody seems to put a time frame on it. You know, if give the services enough time --

Q: The transformation. If you give the services enough time, they'll transform themselves simply by attrition of their weapon systems. Does the administration have -- or does this building have some view as to when transformation should be accomplished, at what rate you want people to start changing from what you consider Cold War policies and equipment to the new era?

Wolfowitz: It's a good question, but let me say, I think rate is more appropriate than when. And it's not a process that really is ever going to end, nor is it a process that in some even reasonably long period of time, like 10 years, is going to change the entire nature of the military.

It would be, frankly, I think, a mistake to think of converting 100 percent of the U.S. military in the course of, let's say, the next decade. Probably something more reasonable, in terms of a percentage, would be 5 to 10 percent of the military truly transformed, partly because you have all these current tasks ongoing that you have to perform, but also because it's almost in the nature of transformational capabilities that they become kind of the leading edge that allows your more conventional or non-transformed forces to do the traditional job.

I don't like to analogize us to the Germans, but it is said that during the -- during World War II, only about 15 percent of the German army was actually the blitzkrieg, the point of the spear, so to speak, and the rest was very traditional infantry.

If we could achieve a 15 percent transformation in 10 or 15 years, I'd say that's a pretty good goal.

Staff: Ladies and gentlemen, just one or two more, please.

Q: Mr. Secretary, you said a few minutes ago that it was possible that the services would be given dollar totals and then a list -- this list of priorities and basically told, "Figure it out how you match the dollars with those priorities."

Can you tell us whether those apportionments of dollars are going to follow roughly the one-third, one-third, one-third historic pattern, or are you looking, in light of your priorities, at some radically different allocation between the services?

Wolfowitz: Let me just say it's not going to be radically different, at least not -- (laughing) -- we've got enough work to do without taking that one on, thank you.

Yes, sir?

Q: The fiscal guidance instructs the services to include costs for front-end base closings or realignments. How is that possible if we don't know what shape it will take at this point?

Wolfowitz: Basically, based on the previous experience with the BRAC, you can make some estimates of how much it would cost and how much you would save over time. They're pretty gross estimates, but it's better than no estimate at all. I think that's basically the answer I would give you. And the estimates I've seen so far are based on that. I don't think, until you've actually identified candidates, that you could get into more detail.

But on the other hand, we know that if you're going to take a 20, 25 percent cut in the base structure, based on past experience, and unfortunately, you spend money to save money, that in the first few years that's going to cost you several billion dollars, and in the out years it will start to save you roughly two and 2-1/2 times that and on into the future. And it's that kind of -- it may be a gross estimate, but it's better than, as I say, not accounting for it at all.

Last one.

Q: Mr. Secretary, would it be fair to characterize the current strategy you're working with as win-hold-win? And another question is, what are your wishes or desires or U.S.-Indonesian military-to- military relations?

Wolfowitz: No, I hate the bumper stickers, but we're talking deterrence, we're talking about defeating aggression, we're talking about then the ability to really impose our will. I mean, the phrase here is win decisively, but let's not -- I mean, win decisively means occupation of other countries, change of regime. It's a pretty robust requirement. So I'm not sure what anyone ever meant by win-hold-win, but I certainly wouldn't characterize this that way.

And I think with respect to Indonesia -- (chuckles) -- he knows where my heart is -- (laughter) -- I think this is -- you know, this is the world's third-largest democracy. It's one of the few in the Muslim, maybe it's one of the few in the Muslim world, and this is kind of a fresh start for them at developing a transition to democracy. And I do believe that a well-constructed military-to-military relationship could facilitate that process. I hope we can engage in it.

Thank you very much.

Q: Mr. Secretary, I wonder if we just briefly might ask General Myers' reaction to a report by the OMB today that the military is greatly exaggerating what it spends on maintaining --

Myers: I've already said that really conflicts with all the data we've seen, and that's really a question for the services. They're the ones who maintain that data.

Q: But that conflicts with all the --

Myers: Everything we've ever seen, yeah. So I suppose you have to go back and look at the assumptions. I haven't done that. I've just read the same report you have.

Q: Thank you.

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